"It was a nasty year for the software stocks in 2025, as investors pondered the disruptive impact of artificial intelligence (AI). With shares of enterprise software and AI agent innovator Salesforce ( NYSE:CRM) and creative software titan Adobe ( NASDAQ:ADBE) starting off the very first trading day of the year with a steep decline, it feels like all hope is lost for 2026, as the ailing software plays come in limping to kick off 2026."
"While it's not a great way to begin a new year, I do think that value investors might have a chance to get a bigger discount on their way down, especially if new AI innovations look to add to the fears of the software-as-a-service (SaaS) companies. Undoubtedly, there's a lot of uncertainty regarding the names, but if AI disruption fears are overdone and the software juggernauts can effectively adopt AI and agents, I do see a scenario where the top players can turn a corner."
"Salesforce and Adobe went into the year with pretty low expectations. And since the year began, expectations have been lowered even further, with Salesforce and Adobe shares down around 3.5% and 5.4%, respectively, year to date, at least at the time of this writing. The big question moving forward is whether these software stocks can catch up after starting the year from behind."
Software stocks suffered heavy losses in 2025 as investors weighed AI's disruptive effects. Salesforce and Adobe opened 2026 with steep declines, leaving low and lowered expectations and year-to-date drops near 3.5% and 5.4%. AI innovations and agents raised additional fears for SaaS companies, increasing uncertainty about future performance. Value investors may find deeper discounts if the sell-off continues. If AI disruption fears are overdone and leading software firms effectively integrate AI and agent technologies, the top players could recover. Each company must execute well to regain investor confidence, but risk/reward may look attractive at current levels.
Read at 24/7 Wall St.
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